Local Government (LTAD) Newsletter - July 2025

Just a reminder that the grocery tax repeal (Public Act 103-0781) takes effect January 1, 2026. This law change eliminates the state’s 1% tax on groceries. However, municipalities and counties can still impose their own local grocery tax through an ordinance. If you’re part of a municipality or county planning to file a new grocery tax ordinance with LTAD, it must be received by LTAD on or before October 1, 2025, to take effect on January 1, 2026. You can mail the certified ordinance to the address provided or submit it through MyLocalTax using the “Submit Certified Ordinance or Resolution” function.

While these ordinances can be passed at any time, it’s essential to submit them by the October 1 deadline to avoid losing out on potential grocery revenue. This is not a one-time opportunity to impose a local grocery tax. The next opportunity is July 1, 2026, with an April 1, 2026 ordinance filing deadline. As of June 30th, 256 grocery tax ordinances have been received.

Please remember that LTAD cannot provide specific statistics on low-rate grocery items. All low-rate items are reported together on Form ST-1, making it impossible to distinguish between groceries and drugs/medical device sales. Additionally, we are unable to provide local government-specific figures for the 2022-2023 grocery tax suspension credit as those statistics were reported at the corporate level by retailers, without a site-specific breakdown.

To calculate your local government’s share of the state’s 1% tax on groceries, you may use our SIC reports. Keep in mind that businesses self-report their SIC code to IDOR. A business may sell groceries but might not fall under a specific grocery code. Consequently, relying solely on this reporting method for accurately assessing potential revenues from a 1% grocery tax may not be the best approach.

LTAD generates and mails the IDOR-50-L-1M, Tax Location Verification, monthly to notify you of new business openings, changes to existing registration of businesses, and discontinuation of businesses within your taxing jurisdiction.

Here are some tips to ensure proper verification and reporting of discrepancies:

1. Your monthly TLV letter reflects the previous month’s registration activities. When responding through MLT, select the previous month from the “Months Available” dropdown. For example, a letter dated June 15, 2025, reflects May activity, so choose May when responding.
2. The TLV process primarily focuses on address verification in your jurisdiction. If an address is listed outside your jurisdiction, please provide the correct local government if you have that information.
3. All businesses on your TLV letter are registered with IDOR. You might not recognize some if they haven’tstarted operating, and some may never begin operations.
4. You do not need to report local business license status to LTAD; it’s for your local licensing purposes only.
5. Regardless of whether a business is online or home-based, it generates tax revenue for your jurisdiction. Confirm that the address is within your taxing jurisdiction.
6. If a business provided LTAD with an address different from its business address, (e.g. mailing address), notify LTAD as it may affect the tax rate at the address in certain districts (e.g. MED and business districts).
7. Changing locations should not be on your TLV letter. Accordingly, new addresses resulting from Leveling the Playing Field found on your taxpayer listing should not appear in your letter. If a business is incorrectly registered as a permanent location instead of changing location, it would appear on your letter. The address provided would likely be the address to which the purchase was shipped.
8. MLT has two functions for use in completing the TLV process each month.
   1. “Respond to Tax Location Verification” is for use in responding to items listed on your letter’s “Verified by LTAD” pages.
   2. “Verify Tax Locations” is for use in responding to items listed on your letter’s “New/Reinstated or discontinued” pages.
9. The LTAD staff utilizies geographic information system (GIS) mapping and/or property tax bills to verify jurisdictions. In MLT, you simply need to agree or disagree with our determination. Any disagreements will be noted under “Verify Tax Locations,” allowing you to provide additional information about the discrepancy.
10. Few items should appear in the “New/Reinstated” section of “Verify Tax Locations” as LTAD staff reviews all new locations monthly. However, any “Verified by LTAD” sites you disagree with will show up under “Verify Tax Locations.”
11. Being listed as “Discontinued” doesn’t mean a business has closed; they may have updated their registration. Research before stating they are still operating, as some may also appear in other sections.
    1. Sometimes these sites are included in the same TLV letter under “New/Reinstated” or “Verified by LTAD.” They may have also appeared in one of these sections on a previous TLV letter.
    2. If a business isn’t listed in any sections on current or previous letters, you can order a taxpayer listing to confirm if they are still active. If they are missing and you believe they are still operating, contact LTAD.

IDOR and LTAD are available to speak at your events about topics related to state and local taxes. To request a speaker, complete our speaker request form and provide detailed information about your event.

LTAD is aware that some local governments have experienced delays in receiving their remittance reports. This issue arose due to a necessary programming change in our system. We have corrected the problem and all requested reports should have been delivered. If you have not received a report but have a confirmation number, please contact LTAD. We ask that you do not reorder the same report as this can cause further delays in the system.